So I’ve had this minor issue with my iPhone for the past year and a half. I have never been able to sync music from my music server and everything else (photos, contacts, calendars, applications, etc.) from my laptop. I use a separate music server, partially for storage capacity and backup, partially to have my entire library on a fixed server for streaming music throughout my home and syncing to all portable (iPod/iPhone) devices. This is a minor issue because I have plenty of access to my music on iPods and throughout my office and home. Generally I prefer not to consume my iPhone’s valuable battery with music playing, but I don’t use most of the storage space so I’d like to have some music on there just in case.
Apple baked the functionality for this into iTunes pretty near the launch of the original iPhone. My problem seemed to be that I had synced music from my laptop, then unchecked the box to remove the music in hopes I could mate this function to the music server. Every time I’d tried to do it in the past, I was faced with this message:

The main reason that I was timid about a reset was the large number of Notes on the iPhone that I didn’t want to risk losing. Apple STILL doesn’t sync notes (or tasks for that matter), which is really odd since they now have notes and tasks as parts of Mail in Leopard. Luckily, with solutions like Evernote and Mark/Space Missing Sync for iPhone and Notebook there are easy work-arounds. I’ve used the latter for iPhone note syncing for months and am gradually switching over to the web-based note system that is Evernote.
Since I finally got around to getting an iPhone 3G (was holding out for something new at MacWorld and I’ve recently discovered the bluetooth on my iPhone is not working correctly–I’d always blamed my Prius–sorry Lola), I thought this would be a good time to give it another shot.
After some futzing and re-syncing I was getting the same warning message. Since everything seemed to sync to the new phone (even notes, though applications were in a different order on the phone), I decided just to try the Erase and Sync on the music server as I’d been advised that the music server should be synced first. Rather than erasing the phone, it synced only the music to the iPhone, leaving everything else alone.
So the message was a false alarm and taking the leap of faith paid off. Your mileage may vary and I’m still not exactly sure whey I was caught in this weird music syncing limbo to begin with, but now everything seems fine.
Bottom line, if you are getting this message even after you’ve un-syncing music to the iPhone from your main computer, it MAY work to just go ahead and Erase and Sync. There are so many variables here, though, that you may also end up erasing all the other info on your iPhone. In this case, just sync the music computer first, then check everything OTHER than music on the main computer and it should work fine.
If you are trying to sync music from two different computers to one iPhone (e.g., laptop and music server), you should check out this guide from Andrew Grant at Shiny Things. It involves some light hacking, which I don’t think would be difficult for most users. It’s not necessary for me, so I’ll skip it. The greatest worry here is that some future version of iTunes will make the hack stop working or worse yet corrupt some settings you changed.